1) Economic and Financial Evaluation

In July 1996, MRTA retained the service of a group of consultant lead by the Industrial Finance Corporation of Thailand (IFCT) to conduct a financial & economic study of the MRTA Initial System and to recommend the possible concession framework for the project.

The study concluded that ISP will generate the economic benefit more than 400,000 million Baht over a 25 year of service. Incorporating the social and other relevant benefits to the country, the economic rate of return (EIRR) is 11.32%. This result is considered high enough to undertake this mass rapid transit project for the socioeconomic benefits, especially for relieving the the traffic congestion problem that has distressed the standard of living and economy of Bangkok, the major contributor to the country’s economy.

A cabinet resolution on September 12, 1995, has decided the exact nature of financing strategies of the project. That is the government would invest directly in the civil works and private sector would provide necessary funding for the electro-mechanical works and also operate the system within a certain concession period.

The financial analysis reported that the project is expected to collect revenue about 300,000 million Baht during 25 year of concession, based on 12 Baht boarding fare and 2 Baht per kilometre travelling in the year 2002. By assuming that the private sector would receive an minimum internal rate of return (IRR) of 15%, the approximated 55% of total revenue would then be shared to him and the rest would be put into the account of MRTA. This allocated revenue will generate MRTA’s IRR to 4.44%.

2) Environmental Impact Assessment (EIA)

An environmental impact assessment of this project based on elevated configuration concluded that there are two major types of adverse impact. One is the impacts during the construction such as noise and vibration, natural areas, waste management, dust emission and traffic disruptions. However, these will be temporary and will return to existing conditions once the construction is completed. Another is impact during operational stage or after completion of the construction such as localized air quality, noise and vibration, historical and cultural resources, and visual and urban landscape. The study also recommended mitigation measures to the above mentioned impacts.

As required by law, the EIA report was submitted to the Office of Environmental Policy and Planning (OEPP) for consideration in December 1993. OEPP arranged a technical-hearing to gather responses and comments from various group of people and concerning parties over the environmental impacts of the ISP. The OEPP concluded its findings and comments together with responses and comments received during the hearing and submitted to the National Environmental Boards (NEB) for further consideration. The NEB, with the prime minister as the chairman, considered and accepted the OEPP’s findings and recommendations in January 1994. As a result, the cabinet instructed MRTA on February 1, 1994 to conduct a feasibility study of underground construction of the ISP southern portion from Hua Lamphong to Huai Khwang where environmental impacts from elevated structures deemed severe. With confirmation of technical feasibility from MRTA, the cabinet, therefore, instructed on May 17, 1994 that the route alignment over that section be constructed as underground. Further, the government (new administration) instructed MRTA on September 12, 1995, to construct the ISP as an entirely underground system for environmental reasons. Such modification of the system is likely to minimize any adverse impacts as opposed of that elevated system.

According to environmental impact assessment the implementation of the ISP as underground will cause some impacts during the construction phase but no adverse environmental impacts during operation. Furthermore, there will be an action plan for mitigation measures and monitoring programmes for the system.